Colleague’s Lie Dooms Legal-mal Coverage
From the Chicago Daily Law Bulletin
Even if you don’t know that a colleague lied on your law firm’s legal-malpractice insurance application, all the attorneys at the firm could lose coverage if the misrepresentation is exposed.
In a 6-1 decision Friday, the Illinois Supreme Court ruled an insurance company could legally rescind a policy because it was procured with a false statement of facts, even though another attorney covered by the policy didn’t know about the misrepresentation.
The dissenting justice, Thomas L. Kilbride, indicated that the ruling will spell trouble for midsize and large law firms.
“Under the majority’s view, a material misrepresentation on an insurance application could cause rescission of the policy as to each and every attorney, despite their reasonable expectations of continued professional liability insurance coverage,” Kilbride wrote.
“Furthermore, as the size of the affected firm increases, so does the potential harm to the public.”
The majority opinion was written by Justice Charles E. Freeman. It overturns a previous ruling authored by Justice Jesse G. Reyes of the 1st District Appellate Court and affirms a decision by Cook County Associate Judge Rita M. Novak.
Read more in our daily News Update...
From the Chicago Daily Law Bulletin
Even if you don’t know that a colleague lied on your law firm’s legal-malpractice insurance application, all the attorneys at the firm could lose coverage if the misrepresentation is exposed.
In a 6-1 decision Friday, the Illinois Supreme Court ruled an insurance company could legally rescind a policy because it was procured with a false statement of facts, even though another attorney covered by the policy didn’t know about the misrepresentation.
The dissenting justice, Thomas L. Kilbride, indicated that the ruling will spell trouble for midsize and large law firms.
“Under the majority’s view, a material misrepresentation on an insurance application could cause rescission of the policy as to each and every attorney, despite their reasonable expectations of continued professional liability insurance coverage,” Kilbride wrote.
“Furthermore, as the size of the affected firm increases, so does the potential harm to the public.”
The majority opinion was written by Justice Charles E. Freeman. It overturns a previous ruling authored by Justice Jesse G. Reyes of the 1st District Appellate Court and affirms a decision by Cook County Associate Judge Rita M. Novak.
Read more in our daily News Update...